Crude oil futures experienced a notable rise on Thursday morning following additional US military strikes on Iran. August Brent oil futures increased by 1.77% to $94.75, while July WTI crude oil futures climbed 2% to $91.83. On the Multi Commodity Exchange (MCX), June crude oil futures rose by 0.60% to ₹8778, and July futures increased by 0.56% to ₹8635.
Geopolitical Tensions
The rise in oil prices was primarily driven by heightened geopolitical tensions. According to a press release by the US Central Command (CENTCOM), US forces conducted additional self-defense strikes on Iranian targets, including military surveillance and communication systems. These actions were in response to Iran's continued aggression, posing threats to US forces and international commercial shipping in the region.
Supply Disruptions
The situation has led to concerns about potential disruptions in the Strait of Hormuz, a critical chokepoint for global oil flows. US President Donald Trump indicated that more strikes could follow if Iran does not agree to a deal, while Iran threatened to close the Strait. Although Iran cannot officially close the Strait, it can complicate vessel crossings, leading to reluctance among shipowners to navigate the area. Currently, oil flows through the Strait are reported at around 2 million barrels per day, significantly lower than the pre-war levels of 20 million barrels per day.
Demand and Inventory
On the demand side, the latest inventory data from the US Energy Information Administration (EIA) shows a tightening US oil market, with commercial crude oil inventories falling by 7.23 million barrels over the last week. This marks the seventh consecutive week of inventory declines, indicating strong demand and consumption trends.
Price Outlook
Looking ahead, the ongoing geopolitical tensions and potential supply disruptions are likely to keep oil prices volatile. The market will closely monitor developments in the US-Iran situation and any changes in oil flow through the Strait of Hormuz. Traders and analysts will also pay attention to upcoming inventory data releases from the EIA to gauge further market tightening.
| Futures Contract | Price | Change (%) |
|---|---|---|
| August Brent | $94.75 | +1.77% |
| July WTI | $91.83 | +2.00% |
| June MCX | ₹8778 | +0.60% |
| July MCX | ₹8635 | +0.56% |
The current geopolitical landscape underscores the importance for commodity traders and procurement teams to stay informed about developments in the Middle East, as these can have significant implications for global oil supply and pricing.
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